You probably have heard that phrase before. It sounds easier said than done. But how do you actually do it? What happens if there is an unexpected expense? (Which there always seems to be…)
I think a good place to start is with your income. You must know exactly how much you are bringing home every single month. Not guess or assume but know the exact dollar amount AFTER taxes.
Once you are clear on the monthly income you must be committed to not go over. Assigning each dollar on how you will spend it, invest, donate it, or pay off debt. Also called a budget, but I prefer to call it a “spending plan”. A budget sounds too restrictive and not cool.
One of the most important things to set aside money for (every month) is big expenses.
Something that only comes up once or a few times a year. For example, things like Christmas gifts or car registration.
Lastly, keeping track of your expenses will give you awareness on how much money is left for the month. Just by knowing will take some stress and anxiety away.
